HomeMy WebLinkAboutFinance & Admin - 1999-01-25FAC\1999-01-25
JAN UARY 25, 1999
FINANCE & ADMINISTRATION COMMITTEE MINUTES
CITY OF KITCHENER
The Finance and Administration Committee met this date commencing at 9:35 a.m., and Chaired by
Councillor J. Ziegler with the following members present: Mayor C. Zehr, Councillors John Smola, Jake
Smola, B. Vrbanovic, J. Haalboom, G. Lorentz and C. Weylie. Councillors T. Galloway, K. Taylor-
Harrison and M. Yantzi were in attendance for part of the meeting.
Others present: Ms. P. Houston, Ms. B. Baker, Ms. L. Bansen, Ms. D. Arnold, Ms. L. Pasternak, Messrs.
J. Gazzola, R. W. Pritchard, D. Paterson, J. Shivas, O. den Ouden, T. Clancy, T. McCabe, S. Gyorffy, B.
Short, J. Witmer and G. Sosnoski.
1. TAX EXEMPTION REQUEST - ROYAL CANADIAN LEGION
The Committee was in receipt of a report and recommendation of no action from P. Houston and
O. den Ouden dated January 20, 1999 in response to a November 23, 1998 Committee request
for additional information. Staff had received a request from the Royal Canadian Legion, Polish
Veteran's Branch 412, for an exemption from taxation under Section 207 (62) of the Municipal Act.
The Committee was also in receipt of the initial staff report dated November 13, 1998.
A discussion took place as to the basis for considering such a request, and Councillor J.
Haalboom offered the opinion that this is an opportunity to recognize the war service contribution
of Legion members. Councillor Ziegler questioned whether current Legion members are actual
veterans or the children of veterans, and Ms. Houston advised that a membership analysis had not
been undertaken. Ms. Houston also noted that the Legion head office has requested that
individual branches across Canada approach municipalities to request the exemption.
Councillor Weylie suggested that staff contact the Association of Municipalities of Ontario and the
Federation of Canadian Municipalities to determine if these organizations have a policy in this
regard. Mayor Zehr pointed out that the City of Toronto has granted an exemption for the period of
1998 to 2000 only, and he noted that the current financial difficulties of the Legion seem to be
short rather than long-term
Councillor G. Lorentz put forward a motion to grant the request of the Legion for a tax exemption,
this exemption to apply for a 10-year period. The motion also requested that the Province amend
its legislation to uniformly exempt Legions, and that the Region be asked to do the same in regard
to their portion of municipal taxes.
Councillor Lorentz argued that this is fair and appropriate given the war sacrifice of Legion
members. Councillor Ziegler pointed out that many war veterans do not belong to the Legion and
that such action would not necessarily help all of those who fought in the world wars.
Mayor C. Zehr put forward a motion to defer consideration of the request to the February 8, 1999
Finance and Administration Committee meeting to allow staff to pursue the concerns raised by
Committee members this date. The deferral motion was then voted on and Lost.
Ms. Houston clarified that the legislation only allows a maximum period of ten years for such an
exemption.
Councillor K. Taylor-Harrison entered the meeting at this time.
A brief discussion took place as to the appropriate term for a tax exemption, and Councillor
Lorentz accepted, as a friendly amendment, a term of five years.
The main motion was then voted on, as amended.
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1. TAX EXEMPTION REQUEST - ROYAL CANADIAN LEGION - CONT'D
On a motion by Councillor G. Lorentz,
it was resolved:
"That Council grant a 5-year exemption from the City portion of municipal taxes to the Royal
Canadian Legion - Polish Veteran's Branch 412 (601 Wellington Street North) and Branch
50 (48 Ontario Street), and that the Regional Municipality of Waterloo be encouraged to do
the same in regard to their portion of taxation; and,
That the Provincial government be encouraged to consider amending the appropriate
legislation so as to exempt Legion properties from municipal taxes province wide in
recognition for service to the country in time of war; and further,
That a copy of this resolution be forwarded to the Minister of Finance, the Regional
Municipality of Waterloo and local M.P.P.'s."
Councillor C. Weylie enquired whether the Army and Navy clubs on Gage Street are similar
organizations to the Royal Canadian Legion, and Ms. Houston replied that she was unsure as to
the status of these organizations.
2. SUPPLEMENTARY TAX BILLING
The Committee was in receipt of a report from P. Houston and O. den Ouden dated January 20,
1999 regarding tax policy and in response to a previous request from Councillor John Smola
concerning a property owner who has been billed retroactively for supplemental tax adjustments
over a three-year period. The report notes that due to a backlog at the Provincial Assessment
Corporation, supplementary assessments were not addressed quarterly as has been the case in
the the past, and as a result a longer retroactive billing is necessary.
Councillor John Smola noted that to the best of his knowledge there are approximately ten
taxpayers in the City who are faced with a significant tax bill as a result of the Provincial backlog
and this has become problematic for some individuals given the amount of the monthly payments.
Councillor Smola acknowledged that these property owners should have known that
supplementary taxes would be owing for preceding years; however, the complicated process
devolved by the Province made this difficult to understand. He indicated his preference for a
minimum repayment period of three years, provided current taxes are paid. Ms. Houston noted
that staff are proposing an eighteen month interest free repayment term, and in the event Council
extends this would need clarification as to whether the extended period is also to be interest free.
Councillor M. Yantzi entered the meeting at this time.
Councillor John Smola indicated his willingness to put forward a motion to grant relief to the ten
properties by allowing them to make monthly, interest free payments over a three year period,
conditional upon the owners meeting their current tax obligations. He suggested that this
arrangement would be without prejudice or precedent and is solely on the basis that it is highly
unusual to receive supplementary tax bills accumulated over a three-year period.
Councillor T. Galloway entered the meeting at this time.
Mayor Zehr suggested that it is not abnormal to receive supplementary bills for two years, and
perhaps the proposed repayment schedule should only apply to the third year supplementals.
Councillor John Smola suggested that was is unusual in this circumstance is to receive three bills
in a single year.
Councillor Galloway questioned the appropriateness of passing a resolution at this time, and
suggested direction to staff as they routinely deal with individual repayment circumstances. He
indicated his concern that a resolution may be interpreted as establishing a new tax policy.
It was agreed that staff be directed to allow owners who received supplementary tax bills for the
2. SUPPLEMENTARY TAX BILLING - CONT'D
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years 1996, 1997 and 1998 to repay these amounts through monthly, interest free payments over
a three year period, provided current taxes owing are paid by the due dates.
3. PROPERTY STANDARDS ORDERS - 126, 128 & 132 WEBER ST W/21 & 23 KRUG ST
The Committee was in receipt of Business and Planning Services report PBS99/11 (January 8,
1999) recommending notification of Council's intention to pass a by-law authorizing work to the
above properties.
On a motion by Councillor K. Taylor-Harrison,
it was resolved:
"That the property owner and mortgagees for the properties known municipally as 126, 128
& 132 Weber Street West and 21 & 23 Krug Street be notified of the City's intent to
consider a by-law at the February 1, 1999 Council meeting authorizing the repair,
replacement or completion of roofing, downspouts, evestroughing, exterior painting,
railings, windows and screens and other associated work at the owner's expense."
4. LOT MAINTENANCE BY-LAWS - 241 BORDEN AVENUE SOUTH/38 BINGEMAN STREET
The Committee was in receipt of Business and Planning Services reports BPS 99/10 and 99/12
(January 12, 1999) recommending notification of the owner's of the City's intention to consider a
by-law to authorize removal of waste materials.
On a motion by Councillor K. Taylor-Harrison,
it was resolved:
"That the City intends to consider a by-law at the February 1, 1999 Council meeting
authorizing the removal of waste material from 241 Borden Avenue South and 38
Bingeman Street, at the property owner's expense, if this has not been done by the owner's
on or before February 12, 1999."
5. JOB EVALUATION AND PAY SYSTEMS AUDIT - FINAL REPORT
The Committee was in receipt of the final report and recommendations of the Project Steering
Committee as submitted by McCrimmon and Associates - Ottawa dated December 2, 1998.
Councillor B. Vrbanovic disclosed a pecuniary interest and abstained from all voting and
discussion concerning the Job Evaluation and Pay Systems Audit report as his wife is employed in
the City's Information Services Division.
Mr. Scott McCrimmon summarized the audit objectives and explained the pay system components.
He noted that at the onset, he was asked to assess the current job evaluation system and advised
that this system does not appear to be the problem; rather, the City should investigate further its
pay range structure, pay administration practices and pay policies.
Mr. McCrimmon outlined the study process and general findings. He noted that on balance, the
system is technically sound and that the City has an unusual integration between union and non-
union positions while most companies have separate structures. He added that this arrangement
seems to be working well. He offered the opinion that the job evaluation documentation has not
been adequately controlled in the past and there is no way to correct this circumstance in the short
term. He clarified that it has been the practice that all employees have access to the job
evaluation manual and weighting factor information. Mr. McCrimmon stated that over time staff
could be re-orientated away from the present factor-by-factor method of evaluation.
Mr. McCrimmon stated that at present the City has 30 pay grades, which is twice as many as
required and he noted that most private and public sector organizations have between 16 and 18
grades. Mr. McCrimmon advised that this large number of pay grades results in system
5. JOB EVALUATION AND PAY SYSTEMS AUDIT - FINAL REPORT - CONT'D
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inflexibility. He also stated that the current evaluation point bands in the management grades are
inconsistent.
Mr. McCrimmon advised that reducing the number of pay grades involves significant time, effort
and cost, the latter mostly relating to implementation costs as a result of required pay adjustments.
He also suggested that union negotiations are required which will ultimately mean changes to the
collective agreement. Notwithstanding this he advised that there are significant benefits as a
result of implementing the audit recommendations.
Mr. McCrimmon noted specific problems with the City's "pink circle" policy, which differs for union
and non-union positions. The result of this is that in some instances different hourly rates are paid
for identical jobs. He advised that the City has no sound, consistently applied performance
appraisal system and that the norm in most organizations is a simple, formal program of this type.
Mr. McCrimmon stated that the 40-hour premium policy as it presently reads is not equitable and
would not withstand a review by the Pay Equity Commission. He suggested that the policy be
changed.
Mr. McCrimmon then reviewed each of the recommendations in the report involving pay
administration policies; the salary administration maintenance manual; the immediate
reclassification of management jobs into fewer pay grades (three to six is recommended from the
current nine); redesign of the job classification levels into fewer pay grades for all staff positions;
establishing a performance appraisal program for all municipal employees; steps to revitalize the
existing job evaluation plan; review of the job evaluation appeals process and procedures; and,
reinstitution of all the original evaluation scores on the "work conditions" factor. He then referred
to the implementation plan in the report and the resources required, noting that pay adjustments
will be required in the area of 1/2 to 1 per cent of the general payroll and 1-1/2 per cent of the non-
union payroll.
A discussion took place concerning the recommendations in the audit report. Councillor Ziegler
suggested that it may not be appropriate to allow personal presentations before the SAMC
Committee as it would involve more time and make it difficult to attract Committee members due to
the more personalized nature of the review. Mr. McCrimmon offered the opinion that this would
not result in a significant increase in workload and that direct representation are usually advisable.
Councillor Galloway noted that this was one of the areas where consensus had not been reached
by the steering committee, and he noted that some staff felt the appeal process is not complete in
the absence of a personal presentation. Councillor Ziegler noted that there is no reference to a
required response from the supervisor concerning an employee submission. Mr. McCrimmon
replied that this is not a requirement at present but he feels the employee should have the option
of making a presentation alone without the supervisor being otherwise given an opportunity for
input. Councillor Weylie enquired whether evaluations and appeals are handled internally in other
organizations, and Mr. McCrimmon replied that they are not always internal; however, this
arrangement seems to work very well for the City. He added that it would be his recommendation
to maintain the close working relationship that exists between union and non-union staff
representatives in regard to this system. Councillor Ziegler noted that some of the costs
associated with implementing these recommendations are significant.
Mayor C. Zehr put forward a motion to adopt all eight recommendations of the Job Evalution and
Pay Systems Audit. He subsequently accepted, as friendly amendments, suggestions that the
recommendations be adopted in principle; consultant fees be paid for from the OMERS windfall;
and that any additional costs be approved by Council in conjunction with an implementation plan.
Mr. Gazzola urged the Committee to recommend adoption in principle, and stressed the need for
the assistance of a consultant in implementing recommendations. Councillor Haalboom
suggested that a full performance appraisal program is essential and should be a high priority for
implementation.
The main motion by Mayor C. Zehr was then voted on, as amended.
5. JOB EVALUATION AND PAY SYSTEMS AUDIT - FINAL REPORT - CONT'D
On a motion by Mayor C. Zehr,
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it was resolved:
"That Council accept and approve, in principle, all of the recommendations outlined in the
final report (December 2, 1998) of McCrimmon and Associates regarding an audit of the
City's Job Evaluation and Pay System; and further,
That any consulting costs relative to implementation of these recommendations be
approved and be funded from the OMERS pension windfall, and that any additional costs
relative to implementation be considered for approval in conjunction with Council's future
review of a detailed implementation plan."
6. FUNDING ALLOCATION - EASEMENT RENEWALS
The Committee was in receipt of a report and recommendation from S. Gyorffy and J. Shivas
dated January 20, 1999 concerning funds for the registration of notices of claim for existing
easements.
On a motion by Councillor G. Lorentz,
it was resolved:
"That the sum of $100,000.00 be allocated to cover the costs associated with the
registration of Notices of Claim to preserve existing easements; and further,
That there be no amendment to the 1999 Capital Forecast in this regard, with funding to be
allocated from the following sources;
Sewer Surcharge (Sewers)
Capital Contingencies (Storm Drains)
Capital from Current (Gas)
Capital from Current (Water)
$40,000.00
$43,000.00
$3,000.00
$14,000.00"
7. REFUNDS FOR RELEASE OF PLANNING AGREEMENTS
The Committee was in receipt of a report from J. Shivas dated January 20, 1999 recommending
discontinuing the current practice of refunding fees for request to release planning agreements
where these have not been responded to within 60 days.
Councillor Ziegler suggested that the current refund policy be amended to reflect a refund of only
50 percent of the current fee in order to cover administrative costs. Mayor Zehr questioned why it
is a problem to meet the response deadline, as 60 days seems to be a lengthy interval. Mr. Shivas
responded that major delays can occur during the summer months, and given, the heavy
workloads circulation to eight approval areas can be problematic. He advised that Legal staff feel
this refund is a major irritant and had questioned why it was being done at all. He noted that the
refund can be replaced with verbal confirmation, which he does not anticipate would be a problem.
Mayor Zehr responded that the simplest solution would be to respond with the 60 day interval.
Councillor Vrbanovic concurred and suggested that if the City is not meeting a service standard it
should issue a refund; however, if the standard is unrealistic then perhaps it should be changed.
On a motion by Councillor B. Vrbanovic,
it was resolved:
"That no action be taken on the request of the Legal Department to discontinue refund of
the $60.00 fee for requests to release planning agreements where these have not been
responded to within a 60-day period; and further
That staff address the management issues which prevent a response within the 60-day time
frame and prepare a report and recommendation if a longer response time is required."
BUSINESS VACANCIES/BUSINESS TAX CALCULATION
The Committee was in receipt of a copy of correspondence dated January 21, 1999 from Stephen
McCrory, McCrory and Associates Ltd., to Ernie Eves, Minister of Finance.
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Mr. McCrory appeared and referred to the concerns raised in his letter noting that they are two-fold
both relating to legislative changes at the Provincial level. The first relative to the method of tax
calculation for new as opposed to established businesses; the second concern relates to the tax
implication of a business vacancy if this vacancy does not fall within all three of the months
specified in the legislation.
Mr. McCrory relayed circumstances involving a tenant in his building who in response to the tax
increase has blended two of the business locations resulting in four layoffs. He also noted that the
tenant felt it was counter-productive to appeal the assessment as in practice approximately 50 per
cent of any appeal award is consumed by appeal costs. He also suggested that the phasing in of
assessment increases over a three-year period should apply to new as well as older buildings.
In regard to the vacancy issue, Mr. McCrory suggested that the impact of the current problem,
which involves owners being required to pay taxes on unoccupied units, will be seriously
magnified in the event of a recession. He suggested that continuing to place a disproportionate
amount of the tax burden on commercial properties rather than on residential is becoming
increasingly problematic.
Mayor Zehr noted that the letter outlining Mr. McCrory's concerns is appropriately addressed to the
Minister of Finance since the Province has created a number of problems as a result of the
legislative changes relative to business vacancies. Mr. McCrory acknowledged that the problem
has been created at the Provincial level, but noted that he was encouraged to approach local
Council in order to make them aware of the situation. Councillor Ziegler asked the Committee to
consider endorsing Mr. McCrory's position.
Councillor Galloway took exception to the reassessment problems created by the Province in
rushing too quickly into the area of tax reform. He also acknowledged the concerns raised by Mr.
McCrory that newly assessed properties in 1999 will not benefit by the phasing in formula, and will
not receive the same benefits as a neighbouring tenant who resides in an older building. He
stressed the need to continue pointing out to the Province areas where changes are required to
address inequities they have created. Ms. Houston reminded Council that they had previously
sent a resolution to the Province concerning the vacancy issue. She also clarified that there would
be no tax relief for a property if there is no tenant occupying the premises for the months of July,
August and September.
Councillor Lorentz suggested that a copy of any resolution of Council in this regard be forwarded
to the Association of Municipalities of Ontario. Mr. Sosnoski reminded the Committee that the
Association will only accept resolutions in the formal prescribed manner. It was agreed that Mr.
Sosnoski would work with Ms. Houston to draft an appropriate recommendation to be inserted in
the Committee report to Council of February 1, 1999. Councillor Ziegler asked that any
correspondence to distribute the resolution include a copy of Mr. McCrory's letter.
On a motion by Councillor B. Vrbanovic,
it was resolved:
"That an appropriate resolution be adopted at the February 1, 1999 Council meeting addressing
the assessment related concerns raised by Mr. Stephen McCrory this date in regard to the
calculation of business assessment and the vacancy issue, with circulation of this
resolution to include the Association of Municipalities of Ontario and the Large Urban
Mayor's Caucus of Ontario."
9. NEXT MEETING
The next regularly scheduled meeting of the Finance and Administration Committee will be held on
Monday, February 8, 1999.
10. ADJOURNMENT
On motion, the meeting adjourned at 11:45 p.m.
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G. Sosnoski
Manager of Corporate Records
and Assistant City Clerk